A strata building bond is a type of insurance that protects the owners corporation of a strata title property in the event that the costs of repairing or reconstructing the common areas of the property exceed the amount held in the reserve fund. The premium for the strata building bond is paid by the owners corporation and is generally based on a percentage of the sum insured.
A Strata Building Bond is a type of insurance that protects the owners corporation of a strata property in the event that the builder fails to complete the construction of the building or rectify any defects in workmanship. It is also known as a Defects Liability Insurance Policy. For more details about strata building bond, you can also click over here.
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The Strata Building Bond is designed to cover the cost of repairing any defects that may become apparent during the defects liability period, which is usually 12 months from completion of the works. The bond will also cover the cost of completing any unfinished works if the builder ceases trading before completion.
The premium for a Strata Building Bond is generally around 2% of the total contract price and is paid by the developer or builder at settlement. The owners corporation will then be reimbursed for any valid claims made against the bond up to the value of the bond.
If you are considering purchasing a strata property, it is important to check with your strata manager or owners corporation whether a Strata Building Bond is in place. This will give you peace of mind knowing that there is protection in place should anything go wrong with the construction of your new home.